Muhammad Jamil Zahid Versus Federation of Pakistan

Abid Hussain Chattha, J .--- This single Judgment shall decide the titled as well as connected W.Ps. Nos. 6432, 6447, 6486, 6903, 6966, 7184 and 7214 of 2025 involving common set of facts and questions of law.

2.Wheat is a major staple and food security crop of Pakistan. Historically, the policy measures employed by the Government from time to time to regulate the procurement, pricing, distribution and sale of wheat have led to multiple disputes amongst the stakeholders including the Government, growers, flour mill owners, seed producers and persons involved in the supply chain of wheat and its by-products. The instant controversy between the Government of the Punjab and owners of wheat stocks emanates from the policy measures approved by the Government of the Punjab regarding the wheat harvest season, 2025. Before proceeding further, it is pertinent to explain the precise factual context in order to determine the moot questions requiring consideration of this Court.

3.Traditionally, wheat has been a semi regulated sector controlled by the Government in an endeavor to maintain balance amongst conflicting interests of various stakeholders. As a norm, the Government used to fix Minimum Support Price (the MSP ) to be enforced at the time of wheat harvest season to ensure that farmers may not be deprived from receiving minimum fair price of their produce in the wake of possible price crash due to abundant and surplus supply. Thus, the Government would buy and procure a handsome quantity of wheat at the MSP fixed by it in competition with the private sector to build a strategic reserve of wheat stock which was subsequently released and sold to private flour mills as per their grinding capacity quotas at intervals on fixed prices till the arrival of next crop. The sale price of wheat was fixed by the Government a little above the MSP after counting in the costs of transportation, storage and financing. The primary policy aim has been to ensure an adequate supply of wheat in the market to ensure price stability so that wheat and its by-products, particularly, roti is available to the masses at an affordable rate.

4.Lately, the Provincial Cabinet of the Punjab duly approved the Wheat Procurement Policy, 2024-2025 (the Wheat Policy ) circulated vide letter dated 16.04.2024 which not only explicitly fixed MSP of wheat at Rs. 3,900 / 40 Kg for the wheat harvest season, 2024 but also encouraged private buying as per Clause XXI thereof, stipulating that private purchase, transportation and storage of wheat will be allowed subject to declaration of wheat stocks with District Administration / DFC or on FLMIS for record purpose. Nevertheless, negligible quantity of wheat was procured by the Government of the Punjab during the wheat harvest season, 2024 under the Wheat Policy as the Government of the Punjab held adequate carryover stocks of wheat. Consequently, the private sector purchased most of wheat from the growers and the market primarily functioned based on the principles of free market economy of demand and supply but subject to Government control.

5.Importantly, during the current wheat harvest season, 2025, the Government of the Punjab publicly announced a policy shift towards deregulation of wheat by adopting a free-market approach and did not announce any MSP of wheat, thereby, allowing the private sector to procure, store, distribute and sell wheat with no restrictions on inter-district or inter-provincial movement of wheat in order to relieve logistical and fiscal burden upon the Government Exchequer. The policy measures were approved by the Cabinet of the Punjab and notified vide Notification No. SO(F-1)3-1/2025-26 dated 22.04.2025 (the Policy Notification ) overriding and preempting the Wheat Policy.

6.Consequently, the Government of the Punjab did not procure wheat during the harvest season, 2025 and the private sector involved in the supply chain of wheat without any discrimination was allowed to procure, store, supply and sell wheat pursuant to the Policy Notification subject to declaration of stocks intended to provide accurate information to the Government regarding availability of stock to ensure supply chain transparency. Due to surplus supply, the market crashed during the wheat harvest season, 2025 to a price ranging from Rs. 2,000 to Rs. 2,300 / 40kg. The available stock was purchased by the private sector at distressed price and many persons including the cultivators were compelled to store wheat in the hope of selling it later as and when the market stabilizes and achieves a reasonable price.

7.Nevertheless, the Director General (Food) / Cane Commissioner issued Notification No. ADF-1(Wheat Policy)/2025 dated 04.09.2025 (the impugned Notification ) in exercise of powers conferred under Section 5(2) of the Punjab Price Control of Essential Commodities Act, 2024 (the Price Control Act ), thereby, fixing maximum retail price of wheat as Rs. 3,000 / 40 Kg with immediate effect and to remain in force until withdrawn or altered for the Province of the Punjab. It directs that no dealer, wholesale dealer, retail dealer or retailer shall charge or cause to be charged, the maximum retail price of wheat offered for sale in excess of the rate fixed and notified.

8.The impugned Notification was issued at a time when statedly the price of wheat in the private sector ranged approximately between Rs. 3,500 to 3,800 / 40 Kg at different locations in the Province of the Punjab. It is alleged that under the garb of the impugned Notification, the Government and its functionaries resorted to multiple coercive measures against the holders of wheat stocks in the Province of the Punjab in an attempt to confiscate stocks and compel the owners to sell it to private flour mills at the fixed price so that the prices of flour and roti can be maintained at the rates deemed appropriate to the Government.

9.The Petitioners claiming themselves as cultivators, registered seed purchasers, traders and food grains license holders invoked the constitutional jurisdiction of this Court under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (the Constitution ) by contending that they are in lawful possession of declared wheat stocks in different quantities identified in their respective Petitions which constitutes their hard-earned moveable property. They held their wheat stocks relying upon the Wheat Policy and the Policy Notification so that they can sell their stocks at a reasonable price not less than MSP of wheat announced for the previous harvest season, 2024 which was itself approved by the Cabinet of the Punjab, as such, cannot be forced to sell their stocks at an arbitrary and unreasonable price.

10.Notices were issued to the Respondents with the direction to submit report and para-wise comments. Interim protection was extended to the Petitioners against coercive measures being employed against them. Notices were also issued to the Attorney General of Pakistan and the Advocate General, Punjab under Order XXVII-A of the Code of Civil Procedure, 1908 as the points raised in the Petitions involved interpretation of the Constitution. Learned Assistant Attorney Generals and Assistant Advocate General stated that they have received requisite instructions to argue the case.

11.Learned Counsel for the Petitioners submitted that the impugned Notification is not only inconsistent with the MSP of wheat fixed in the Wheat Policy and the Policy Notification but also purportedly compels all stakeholders including growers to sell their wheat stocks at an abnormally low price than the earlier declared price in the Wheat Policy. The draconian coercive measures being employed under the facade of the impugned Notification are against the express mandate of the Wheat Policy and the Policy Notification. The impugned Notification was issued without the publication of any supporting material, consultation of stakeholders and without any notice to the affected growers and persons involved in the supply chain of wheat by explaining the factual basis for overriding or pre-empting the Wheat Policy and the Policy Notification. This is particularly so when the MSP of wheat fixed by the Government of the Punjab under the Wheat Policy was approved by the Provincial Cabinet after extensive consultations by factoring in cultivation costs, market realities and food security concerns. Therefore, the impugned Notification which unilaterally, arbitrarily and unreasonably directs to sell wheat at Rs. 3,000 / 40 Kg is unconstitutional, unlawful, arbitrary, confiscatory, unreasonable, without jurisdiction, void ab initio and of no legal effect, offending fundamental rights of the Petitioners granted under Articles 4, 9, 18, 23, 24 & 25 of the Constitution inasmuch as the Petitioners cannot be coerced or compelled to sell their property at depressed price below the prevailing market price, particularly, when the Petitioners had a lawful right and legitimate expectation to realize adequate compensation for their wheat stocks not less than the MSP of wheat fixed in the Wheat Policy.

12.Learned counsel for the Petitioners vociferously contended that the Government cannot approbate and reprobate in the same breath by first proceeding to deregulate the wheat sector asking the private sector to buy and store wheat and later, resort to coercive regulations by confiscating their stocks and compelling them to sell at distressed price to other private actors. Learned counsels strongly refuted the allegations that the Petitioners are hoarders and submitted that if the Government is bent upon to arbitrarily confiscate wheat from the Petitioners, they are ready to sell the same to the Government but only against adequate and due compensation which should not be less than Rs. 3,900 / 40 Kg equal to the MSP of wheat fixed by the Government of the Punjab under the Wheat Policy as approved by the Provincial Cabinet. It was broadly stated at bar that the current wheat price within the private sector ranges from Rs. 3,500 to Rs. 3,800 / 40 Kg at different locations in the Province of the Punjab but after issuance of the impugned Notification, the Government is taking coercive measures against the Petitioners and other stakeholders by confiscating their stocks at Rs. 3,000 / 40 Kg and supplying it to flour mills of their own choice to artificially keep the price of roti at fixed price to gain political milage, thereby, providing subsidy at the cost and expense of the Petitioners and other stakeholders.

13.It was apprised that impugned actions of the Government are inherently detrimental to achieve the objective of deregulated wheat sector. The Institute of Strategic Studies, Islamabad has warned that the present model of partial deregulation, whereby, the state withdraws from procurement but retains price control or issues ad hoc price directives, creates market distortions and transfers the burden of price suppression to farmers and stakeholders to their detriment which negatively impacts their incomes. Independent market reporting institutions have also opined that while the Government signals a move to liberalize wheat markets and rely more on private sector procurement, multiple bans on free movement of the commodity within and outside the province and the country are leading to uncertainties which hamper predictable market functioning and highlight the need for a reasoned transitional policy. Therefore, the imposed sale price which is even less than the cost incurred by the Petitioners in growing, procuring and stocking wheat is unfair and unreasonable, as such, not sustainable.

14.Accordingly, the Petitioners prayed that the impugned Notification be set aside being illegal, unlawful, void and ultra vires to the Constitution and law. Consequently, the Petitioners may be held entitled to sell their wheat stocks at least at the Government notified MSP of wheat at Rs. 3,900 / 40 Kg as stipulated in the Wheat Policy. In the event of continued coercive measures, the Respondents may be directed to procure wheat of the Petitioners at the aforesaid price and pay fair compensation for any loss suffered in the interest of justice and fair play. It is also prayed that the Respondents be restrained from ceasing, confiscating, removing, transporting, dispossessing and compelling to sell wheat stocks at the arbitrarily fixed price or from adopting any other coercive measures against the person or property of the Petitioners.

15.Learned Provincial Law Officer submitted that the Petitions are not maintainable on multiple scores. The Petitions relate to price mechanism and regulation of commercial and policy matters which fall within the exclusive domain of the executive and as such, are immune from judicial review under Article 199 of the Constitution. The principle was emphasized in Order dated 12.08.2021 passed by the Supreme Court of Pakistan in case titled, Federation of Pakistan through Secretary Ministry of Industries and Production v. Hamza Sugar Mills Limited, etc. in PLD 2021 SC 806. The Petitions are also incompetent since an earlier Petition praying for wheat procurement by revising the MSP of wheat has been dismissed by this Court vide Order dated 24.04.2024 passed in case titled, Mazhar Siddique Cheema v. Government of the Punjab, etc. in W. P. No. 24821 / 2024. Further, the impugned Notification was issued under the Price Control Act, Section 12 whereof, provides for alternate remedy of appeal which has not been availed by the Petitioners. This is especially so when earlier notification dated 06.07.2024 regarding fixation of indigenous price of wheat has not been assailed in the Petitions. Moreover, Section 18 of the Price Control Act expressly states that no suit, prosecution or other legal proceeding shall lie against Provincial Controller General or any other officer authorized by him or Controller of Prices and Supplies for anything which is in good faith done or intended to be done in pursuance of any order made under the Price Control Act. Hence, the titled and connected Petitions being incompetent and non-maintainable, are liable to be dismissed.

16.On merits, he submitted that the impugned Notification has been issued in consonance with law, particularly, when this Court vide Order dated 02.06.2020 passed in case titled, Dewan Amlak Ahmad v. Government of Punjab in W. P. No. 21729 / 2010 has held that reasonable restrictions can be imposed upon any business in the larger public interest under Article 18 of the Constitution. As such, the impugned Notification has been issued in the larger public interest which preempts private and individual interests in order to prevent artificial price hike and illegal profiteering of wheat. He explained that the prices of essential commodities were initially regulated under the Price Control and Prevention of Profiteering and Hoarding Act, 1977 (the Hoarding Act ) which is a federal enactment but after promulgation of the Constitution (Eighteenth Amendment) Act, 2010, the matter fell within the provincial legislative competence which was aptly held by learned Division Bench of this Court in Hamza Sugar Mills case decided vide Judgment dated 02.10.2023 in ICA No. 61692 / 2021 reported as PLD 2023 Lah. 736 . It has been unequivocally declared therein that price fixation of essential commodities is within the Provincial legislative competency and the Provincial Assembly of the Punjab can pass an appropriate legislation, whereafter, the Price Control Act was passed.

17.He further argued that in an open market, prices are controlled by ensuring free competition, however, at the same time, the Government always keeps a check on any non-competitive behavior, such as, cartelization, hoarding and illegal profiteering. As such, the Government is empowered to impose restrictions to control prices of essential commodities for the wellbeing of the consumers. Accordingly, the Price Control Act was promulgated with the objective to control prices of essential commodities and for providing an effective mechanism for fixing of prices of essential commodities, to control artificial price hike and profiteering of essential commodities. Wheat is an essential commodity listed in the schedule of the Price Control Act. The impugned Notification has been validly issued under Section 5(2) read with Section 6 of the Price Control Act. In addition thereto, the Foodgrains (Licensing Control) Order, 1957, as amended up to 2025 (the Foodgrains Order ) framed under the provisions of the Punjab Foodstuffs (Control) Act, 1958 (the Punjab Foodstuffs Act ) also empowers the Provincial Government to regulate the storage and stocks of wheat under a licensing regime. Hence, only a foodgrains license holder is entitled to maintain wheat stocks. Clause 7 of the Foodgrains Order binds a licensee to comply with any direction of the Provincial Government or by the Licensing Authority with regard to purchase, storage or sale of foodgrains who is bound to follow the terms and conditions of the license issued to him. Clause 4(ii) of the Foodgrains Order also directs the licensee to submit data-wise wheat sale and purchase report to the Licensing Authority on the prescribed form.

18.Learned Assistant Advocate General disclosed that the Government of the Punjab did not implement the MSP of wheat for the current wheat procurement season, 2025 and did not make any procurement in order to move towards the deregulated wheat sector for ensuring price stability, farmers profitability, value addition and transparency pursuant to policy measures under the Policy Notification. Implementation of these policy measures were subject to the recommendations of the Steering Committee constituted under the Policy Notification. The Steering Committee held a number of meetings to review the implementation process of policy measures during current wheat harvest season, 2025. In the second half of the month of August, 2025, wheat prices showed a sudden increase due to procurement of wheat from market for speculation by the stockists. Further, agricultural production and supply chains were disrupted due to recent floods. The population living in the rural areas also migrated towards the urban areas which also caused an increase in the demand of wheat and flour in the open market. In order to prevent any artificial price hike and profiteering, to ensure the smooth supply of essential commodities under food security system of the Province and to make abundant availability of wheat at the notified price, the impugned Notification was issued fixing the retail price of wheat at Rs. 3,000 / 40 Kg across the Province of the Punjab. Hence, the impugned Notification is liable to be protected by this Court as it has been issued to ensure availability of wheat at the notified rate in the open market and is essential to prevent hoarding and illegal profiteering. The stated object in greater public interest providing relief to the masses must prevail over private commercial interests. The Petitioners are not cultivators but wheat traders, hoarders and stockists who have purchased wheat from open market without foodgrains license and thus, are liable to be proceeded under the relevant provisions of law. As such, the impugned Notification is indiscriminately applicable throughout the Province of the Punjab and no discrimination or unequal treatment is meted out by the Respondents to the Petitioners except in accordance with law. He further emphasized that wheat price cannot be notified under the Wheat Policy because the same has lapsed and is not relevant qua price fixation pursuant to the impugned Notification. Therefore, the impugned Notification is valid, reasonable and beneficial to the people requiring due protection. Hence, the Petitions are liable to be dismissed.

19.Learned Federal Law Officers on behalf of the Federation of Pakistan submitted that the matter in the titled and connected Petitions pertains to the Wheat Policy, Policy Notification and the impugned Notification which fall within the purview of the Government of the Punjab. The Federal Government did not announce any MSP for wheat in the Rabi Season 2024-25 since after the Constitution (Eighteenth Amendment) Act, 2010, the subject falls within the provincial domain. Nevertheless, the Federal Government is currently in the process of developing a National Wheat Policy in consultation with the provinces to address the challenges faced by wheat farmers and consumers, ensuring balanced production, procurement and market stability. Hence, the Federation of Pakistan is not a relevant Respondent having no direct involvement in the issuance, administration and enforcement of the impugned Notification. Therefore, the titled and connected Petitions may be decided on the basis of submissions made by the Provincial Government.

20.Arguments heard and record perused.

21.At the very outset, it is imperative to address the objections regarding maintainability of the titled and connected Petitions. There is no cavil to the proposition that judicial restraint is generally exercised in the matters of Government policy based on the premises that policy measures fall within the administrative and executive domain of the Government. However, it is equally well settled that power of judicial review vested in this Court under Article 199 of the Constitution is always available to interfere in such policy matters which are found to be unconstitutional, unlawful, arbitrary, unreasonable or mala fide . The case law relied upon by learned Law Officer is not attracted to the instant cases. Hamza Sugar Mills case (supra) relates to an impugned interim order passed by this Court in a pending Writ Petition regarding which it was observed by the Supreme Court of Pakistan that legal issues involved in the main Petition ought to be addressed by this Court instead of dilating upon the technical details regarding price fixation of sugar. Similarly, in Mazhar Saddique Cheema case (supra), request for revisiting the MSP under the Wheat Policy was declined by observing that the same fell within the domain of the executive. In Dewan Amlak Ahmad case (supra), a notification issued under Section 3 of the Punjab Foodstuffs Act was judicially scrutinized by this Court in exercise of power of judicial review which prohibited the storage of wheat of more than 1000 Kg by a person for his personal use and his family on the ground of unreasonableness and the Petition was dismissed by holding the restriction as reasonable. As such, in none of the above cases, it has been held that power of judicial review is not available to this Court to examine policy measures with reference to infringement or enforcement of fundamental rights under the Constitution which is essentially the central issue raised in the instant Petitions. The Court is not called upon to fix the price of wheat or examine technical details of price fixing of wheat but is required to scrutinize the validity, scope and ambit of the impugned Notification with reference to the deregulation policy measures set in motion by the Provincial Cabinet in order to determine if the Petitioners can be compelled to sell their wheat stocks at the arbitrarily fixed price. The consistent and well entrenched jurisprudence regarding the scope and ambit of judicial review of this Court with respect to Government policies was aptly reiterated by the Supreme Court of Pakistan in case titled, Senior General Manager, Pakistan Railways and others v. Muhammad Pervaiz (2024 SCMR 581) in the following words:-

Therefore, in view of the stated jurisprudence regarding exercise of power of judicial review, the matters of policy that purportedly appear to the Court to be unconstitutional or unlawful violating the fundamental rights conferred upon the citizens can be validly and legitimately examined. Hence, the objection of the Respondents that the Petitions questioning the policy measures of the Government cannot be examined by this Court is unfounded and is turned down, accordingly.

22.The second objection to the effect that the Petitioners have not availed the remedy of appeal under Section 12 of the Price Control Act is equally misconceived for the reason that remedy of appeal provided therein is against an Order passed under the provisions of the Price Control Act by specific Government functionaries but in the titled as well as connected Petitions, neither any specific Order has been passed against the Petitioners nor the same is assailed therein. Rather, the vires of the impugned Notification has been questioned being without jurisdiction on account of its inconsistency with the Policy Notification and the Constitution in the wake of allegations of the Petitioners that they are being proceeded against through multiple self-conceived measures in violation of due process of law and even beyond the scope of the impugned Notification, if the same is considered on its face value. Therefore, under the peculiar facts and circumstances of the case, the remedy of appeal provided under the Price Control Act cannot be termed as effective or efficacious. Further, failure on the part of the Petitioners to assail an earlier similar notification dated 06.07.2024 is of no consequence since the same was issued prior to deregulation regime under the Policy Notification. Hence, the objection qua maintainability of this Petition on the ground that the Petitioners have not availed alternate remedy provided by law is dismissed.

23.The third objection regarding incompetency of the Petitions in view of Section 18 of the Price Control Act is equally misplaced for the reason that the said provision of law merely provides protection to the officials performing their duties and functions against prosecution or actions done in good faith or intendent to be done in good faith, whereas, the Petitioners have invoked the jurisdiction of this Court in order to protect and safeguard their stated legal and fundamental rights.

24.The controversy between the parties requires this Court to examine the following questions:-

25.The Government of the Punjab has claimed that it lastly fixed MSP of wheat for the harvest season, 2024 under the Wheat Policy. However, it did not fix MSP nor procured wheat during the wheat harvest season, 2025 under the Policy Notification which deregulated the wheat sector by taking a conscious decision to abandon the regulation of wheat. At the same time, it is claimed that the Government of the Punjab still retains the power to fix maximum retail price of wheat and can take coercive measures compelling the wheat stock holders to sell their wheat stocks at the fixed price under the existing anti-hoarding laws in public interest. Before discovering the salient features and extent of deregulation plan as well as the applicability of existing anti-hoarding laws in the light of prevailing Policy Notification, it is advantageous to consider the constitutional guarantees accorded to the Petitioners.

26.Article 4 of the Constitution ordains that to enjoy the protection of law and to be treated in accordance with law is the inalienable right of every citizen. Article 9 unequivocally proclaims that no person shall be deprived of life or liberty save in accordance with law. Needless to state that the right to earn livelihood in accordance with law is an inseparable part of the right to life. Article 14 of the Constitution preserves and protects the dignity of the person. Article 24 of the Constitution grants freedom of trade, business or profession subject to such qualifications, if any, as may be prescribed by law and allows regulation by a licensing system or regulation in the interest of free competition. More importantly, Article 23 of the Constitution declares that every citizen shall have the right to acquire, hold and dispose of property in any part of Pakistan, subject to the Constitution and any reasonable restrictions imposed by law in public interest. Similarly, Article 24 of the Constitution states that no person shall be deprived of his property save in accordance with law and that no property shall be compulsorily acquired or taken possession of save for a public purpose, and save by the authority of law which provides for compensation thereof and either fixes the amount of compensation or specifies the principles on and the manner in which compensation is to be determined subject to protection accorded to the validity of certain laws in specified conditions as listed in Article 24(3) of the Constitution. Equal protection of law and due process is also guaranteed under Article 25 of the Constitution.

27.The Black s Law Dictionary, 12th Edition (Page 557) defines the term deregulation as under:-

deregulation, n. (1963) The reduction or elimination of governmental control of business, esp. to permit free markets and competition.

28.It follows from the above that deregulation can be absolute allowing free market economy to determine the rules of the game based on the principle of demand and supply or partial where the sector may be placed under set of regulations in a manner that the Government retains some control. In order to understand the deregulation plan, it is expedient to reproduce the applicable Policy Notification as under:-

NOTIFICATION

No.SO(F-1)3-1/2025-26. Consequent upon the approval of the Provincial Cabinet conveyed vide letter No. SO(CAB-II)1-38/2025 (Circulation), dated 21-04-2025, the Government of the Punjab (GoPb), with a view to moving towards the deregulated wheat sector for ensuring price stability, farmer s profitability, value addition and transparency, is pleased to take the following measures in the Punjab:-

2. The GoPb's owned godowns/warehouses will be leased/rented out to the Accredited Warehouse Operators, on competitive rates and following all legal and codal formalities, for providing more storage facilities to the wheat farmers/growers/traders in the province by the Directorate General of Food / Cane Commissioner.

3. The GoPb shall introduce a liberalized grain licensing regime for wheat farmers, traders and processors in the province subject to fulfilment of the conditions.

4. There shall be no Inter-district and Inter-provincial ban on the movement of wheat by the Provincial Government.

5. The GoPb shall restrict itself to procurement of wheat, if needed, through an open and competitive bidding process under Punjab Procurement Rules 2014 (amended from time-to-time).

6. There shall be no anti-hoarding actions on the declared wheat stocks in the province.

7. The GoPb, subject to terms and conditions, will provide a Special Financing Facility of Rs. 100 billion to the Flour Millers and Grain License-holders in the Punjab to ensure maximum purchases of wheat from the farmers for Current Harvesting Season 2025.

8. The GoPb, subject to terms and conditions, will extend a Special Financing Facility, in conjunction with the Financing Facility for Storage of Agricultural Product (FFSAP) by the State Bank of Pakistan, for expansion of agri-warehousing network for attracting private sector investment for rehabilitation and construction of agri-warehousing in the province.

9. A Steering Committee to steer the process of deregulated wheat sector in the province, with the following composition, is hereby constituted:

Minister for Agriculture Member

Special Assistant to C.M. on PC&CMD Member

Secretary, Finance Department Member

Secretary, Agriculture Department Member

Secretary, PCSCM Department Member

Director General Food/

Cane Commissioner, Punjab Member/Secretary

Any other member to be co-opted by the Steering Committee. Member

The TORs of the Steering Committee shall be as under:

(Signed)

MUHAMMAD AJMAL BHATTI SECRETARY PRICE CONTROL & COMMODITIES MANAGEMENT DEPARTMENT

(Underlining is Mine)

29.The Policy Notification unequivocally spells out the express decision of the Government of the Punjab to deregulate the wheat sector for ensuring price stability, farmer s profitability, value addition and transparency. Incentives for storage and financing are extended to those who wish to benefit from the same subject to fulfillment of attached conditions. Farmers owning up to 50 acres of land and traders with valid food grain license under the Foodgrains Order were held eligible for the Electronic Warehouse Receipts (EWR) system. Liberal licensing regime was promised to farmers, traders and processors. Apart from farmers as producers, all stakeholders involved in the procurement, storage, supply and sale chain of wheat are indiscriminately referred to as traders or processors . In general terms, three express rights were indiscriminately conferred under the deregulation plan. First, that there shall be no inter-district and inter-provincial ban on the movement of wheat by the Provincial Government. Second, that the Government of the Punjab shall restrict itself to procurement of wheat, if needed, through an open and competitive bidding process under the Punjab Procurement Rules, 2014 (the Procurement Rules ) as amended from time to time. Third and most importantly, that there shall be no anti-hoarding actions on the declared wheat stocks in the Province. Hence, for all those who did not wish to benefit from storage and financing incentives under the deregulation plan could acquire wheat stocks subject to declaration of wheat stocks, understandably to enable the Government to analyze and monitor data regarding available quantity of wheat in the Province so as to effectively monitor the deregulated market. As such, the private sector was called upon to invest in the storage and procurement of wheat in a deregulated regime. Conspicuously, there is no covenant for fixing the maximum retail price of wheat as with the introduction of deregulated regime, the Government discontinued its past practice of stipulating MSP of wheat and thus, unequivocally provided that the Government shall purchase wheat as and when needed through competitive bidding. Absolute protection was simultaneously provided against anti-hoarding actions to farmers and traders subject to their only obligation to declare their held quantity of wheat stocks. Therefore, declared wheat stocks of the farmers, producers and traders under the Policy Notification cannot be confiscated and they cannot be compelled to sell their wheat stocks to the flour mills at the rate fixed in the impugned Notification. The only option available to the Government is to acquire wheat stocks in the required quantity through competitive bidding under the Procurement Rules. This constitutes the essence of the deregulation plan encompassed in the Policy Notification.

30.Notwithstanding such clear and unambiguous policy initiatives contained in the Policy Notification which is approved by the Cabinet of the Punjab, when the price of wheat rose and escalated beyond Rs. 3,000 / 40 Kg, the Director General (Food) / Cane Commissioner abruptly and unilaterally issued the impugned Notification in exercise of powers conferred under Section 5(2) of the Price Control Act, thereby, fixing maximum retail price of wheat at Rs. 3,000 / 40 Kg with immediate effect and to remain in force until withdrawn or altered for the entire Province of the Punjab. The impugned Notification directs that no dealer, wholesale dealer, retail dealer or retailer shall charge or cause to be charged, the maximum retail price of wheat offered for sale in excess of the rate fixed and notified.

31.At this juncture, it is pertinent to briefly examine the extent of applicability of various anti-hoarding enactments under the deregulated regime set in place under the Policy Notification relied upon by the Provincial Law Officer i.e. the Hoarding Act, the Punjab Foodstuffs Act, the Foodgrains Order and the Price Control Act to consider the contention of learned Law Officer that maximum retail price of wheat could be fixed followed by coercive measures against hoarders and stockists in accordance with the provisions of the above statutes even during the subsistence of the Policy Notification.

32.The Hoarding Act is essentially a federal enactment dealing with price control and prevention of profiteering and hoarding of essential commodities included in the Schedule thereto. It has lost its relevance qua its applicability to the Province of the Punjab after the promulgation of the Constitution (Eighteenth Amendment) Act, 2010 since the subject of pricing and regulation of essential commodities within a Province falls within the competence of the Provincial Assembly subject to Article 151 of the Constitution which deals with inter-provincial trade and commerce, confers exclusive mandate to the Parliament to impose any restrictions on the freedom of trade, commerce or inter-course between one Province and another or within any part of Pakistan as may be required in the public interest and simultaneously, prohibits a Provincial Assembly or a Provincial Government to make any law or take any executive action including imposing of tax which restricts free trade of goods or discriminates between similar goods subject to the exception of making any law in the interest of public health, public order or morality or preventing or alleviating any serious shortage in the Province of any essential commodity with the consent of the President.

33.The Punjab Foodstuffs Act aims to control the supply, distribution and movement of trade and commerce in foodstuffs. Wheat is included in the definition of foodstuffs. It envisages a comprehensive system of regulation through notified orders, licenses, permits or otherwise under various provisions for maintaining supplies, equitable distribution and fair prices of foodstuffs. It also envisions arbitration, lists offences, prescribes penalties, sets up Tribunals for trial and provides remedy of appeal against orders of conviction. Pursuant to the Punjab Foodstuffs Act, the Foodgrains Order has been issued to regulate wheat through licenses granted by the Licensing Authority. The stipulations in the Punjab Foodstuffs Act and the Foodgrains Order are drastically inconsistent and incompatible with the deregulation regime encapsulated in the Policy Notification for the obvious reason that former call for a regulated regime while the latter requires deregulation. Hence, the Foodgrains Order has been invoked in the Policy Notification for limited purposes for wheat traders who want to benefit and avail the storage and financing facility in terms of Clauses 1(c) and 7 of the Policy Notification. Therefore, the contention that confiscatory regulatory regime under the Punjab Foodstuffs Act and the Foodgrains Order could simultaneously be enforced in the presence of Policy Notification in the same manner as before the issuance of the Policy Notification is a fallacy. Had this been the case, the Policy Notification could expressly state the extent of applicability of regulatory regime under the Punjab Foodstuffs Act and the Foodgrains Order but it did not aptly apply the same to the deregulatory regime for otherwise the very purpose of deregulating the wheat sector would be defeated.

34.The impugned Notification has been issued under the Price Control Act promulgated on 14.06.2024 with the declared objectives to provide effective mechanism for fixation of prices of essential commodities; to control artificial price hike and profiteering of essential commodities in the Punjab; and for matters ancillary thereto. Wheat is included in the Schedule of the Price Control Act at serial No. 2 as an essential commodity. A complete code of regulation is put in place. Price Control Council is designated as an apex regulatory body constituted under Section 3 thereof headed by Minister for Price Control and Commodities Management or any public representative nominated by the Chief Minister. Price Control Council is vested with all necessary powers to regulate equitable distribution of essential commodities in terms of prices, production, movement, transport, supply, distribution, disposal and sale. The power to fix price of an essential commodity is also available to the Provincial Controller General and can be exercised by an authorized officer by way of delegated authority. All ancillary powers of regulation are also available including but not limited to inspection, seizure and forfeiture of stock, sealing of the business premises and requiring any person holding stock of essential commodity to sell in whole or a specified part thereof at such price, to such persons or class of persons and under such conditions as may be specified in the order. The powers so vested are required to be exercised through licenses, permits or directly under the provisions of the Price Control Act by means of an order to this effect subject to requirements and conditions, if any, attached with such proceedings. Importantly, Section 8 of the Price Control Act provides that notwithstanding anything contained in any other law for the time being in force and in addition to the prosecution thereunder, the essential commodities seized under the Price Control Act may be sold by an officer who seized the same, on the spot at the prices fixed for such essential commodities under the Price Control Act. The sale proceeds so collected shall be deposited in a profit bearing account maintained in any Scheduled Bank empowered to receive Government dues and if the accused person whose essential commodity is sold is acquitted, the deposited amount shall be released to him and in case of conviction, the deposited amount shall be forfeited to the Government. Ancillary provisions such as granting the remedy of appeal, listing of offences and penalties, providing for forum and procedure of trial are also made part of the Price Control Act. Section 22 of the Price Control Act provides an overriding effect to any order made thereunder, notwithstanding anything inconsistent therewith contained in any enactment other than the Price Control Act or any instrument having effect by virtue of any enactment other than the Price Control Act.

35.The conjunctive analyses of the Punjab Foodstuffs Act, the Foodgrains Order and the Price Control Act reveal that provisions and regulatory framework is similar in character and nature and in fact, amounts to duplication and overlapping leading to confusion. Nevertheless, the stringent regulatory regimes under the aforesaid enactments are drastically opposed to policy measures qua deregulation contained in the Policy Notification. The both are mutually destructive and cannot simultaneously operate and co-exist. Precisely for this reason, protection against anti-hoarding actions has been extended in the Policy Notification on the declared wheat stocks. Conscious of this fact, neither the Petitioners nor the Respondents have placed on record any specific confiscatory orders passed under any provision of the aforesaid enactments. Rather, coercive measures are being employed through threats and intimidation. It is, therefore, held that anti-hoarding laws cannot be enforced against any person holding declared wheat stocks in view of express protection granted under the Policy Notification.

36.It is explicitly clear that the impugned Notification is only applicable to dealers, wholesale dealers, retail dealers or retailers covered in the definition of dealer under Section 2(f) of the Price Control Act, thereby, consciously excluding producer separately defined under Section 2(l) of the Price Control Act in an evasive attempt to protect the farmers and traders under the Policy Notification but provided a veiled legal cover to Government functionaries to even act against the farmers and traders holding their wheat stocks in compliance to the Policy Notification. The impugned Notification further directs that no wholesale or retail dealer shall charge or cause to be charged the maximum retail price of wheat offered for sale in excess of the rate fixed and notified, however, the Petitioners who have not offered their stocks for sale are being forced to sell their stocks at the fixed price. Another facet of the impugned Notification is that obviously even the dealers could not sell wheat at the fixed price when the prevailing private sector price was much higher and they were receiving the product at a price higher than the fixed price. During the couse of arguments, it was conceded by all sides including learned Law Officers that prevailing private sector price of wheat ranges from Rs. 3,500 to 3,800 / 40 Kg in different districts of the Punjab and the price was even higher in other provinces. Notwithstanding that fixation of maximum retail price of wheat is not permissible under the Policy Notification, there is, even otherwise, no power to fix an arbitrary price of any essential commodity in terms of Section 4 of the Price Control Act which only mandates fixation of fair price. No consultative process with the stakeholders or an objective and rational basis of price fixation or directions of the Price Control Council as ordained under Section 6 of the Price Control Act have been shared with this Court regarding fairness of price and due process regarding the impugned Notification. Thus, a subordinate functionary of the Government could not invoke the Price Control Act to arbitrarily fix the price of wheat in the absence of any stipulation to this effect in the Policy Notification approved by the Provincial Cabinet, thus overriding and superimposing his decision on that of the elected Cabinet. This is particularly so, when no decision of the Provincial Cabinet allowing for fixation of maximum retail price of wheat has been placed on record requiring price fixation by the Director General (Food). Hence, the impugned Notification is unconstitutional and unlawful being without jurisdiction, arbitrary, confiscatory, unreasonable and inconsistent with the covenants of the Policy Notification approved by the Cabinet of the Province of the Punjab. The same is struck down, accordingly.

37.It is manifestly evident that in order to address supply chain distortions and price hike, the Government of the Punjab instead of acquiring wheat through competitive bidding or making arrangements for importing wheat to supplement supply of wheat to maintain price stability backed out from its stated policy covenants stipulated in the Policy Notification and resorted to coercive measures by raiding and seizing wheat stocks and compelling the owners to sell the same to private flour mills at the price fixed in the impugned Notification. It is not denied by the Respondents that they did not take coercive measures against the Petitioners. Rather, such actions have been defended by maintaining that the Petitioners are not foodgrains license holders but are hoarders and stockists and as such, must face the wrath of the Government and part with their stocks at the fixed price in the impugned Notification since the larger public good prevails over private and individual commercial interests. Conversely, the Petitioners have candidly stated that as cultivators, seed producers and traders involved in the supply chain of wheat, they are in lawful possession of their declared wheat stocks and cannot be compelled to sell the same at an unfair and unreasonable price fixed in the impugned Notification. The factual determination of the status of the Petitioners is beyond the scope of constitutional jurisdiction of this Court. However, even for the sake of arguments, if it is hypothetically assumed that a person is holding undeclared stock of wheat yet he is entitled to due process of law in terms of any such allegation providing him an opportunity to establish that he is holding declared wheat stock in accordance with the Policy Notification and cannot be compelled without due process to sell his wheat stock at the rate notified by the Government. At best, such a person may be required to make his stock available to the Government to be purchased through competitive bidding under the Procurement Rules. In fact, all the Petitioners are ready to sell their wheat stocks to the Government at the prevailing market price and their grievance is restricted against compulsory sale at the rate fixed which is discriminatory and offends due process in terms of Articles 4, 9, 23, 24 and 25 of the Constitution in the wake of deregulated regime promised to the Petitioners pursuant to the Policy Notification.

38.At the cost of repetition, it is held that the Policy Notification provides express protection against any anti-hoarding actions regarding declared wheat stocks and explicitly restrains the Provincial Government to impose any ban on inter-district and inter-provincial movement of wheat. In fact, it encourages and calls upon traders to purchase, store and supply wheat at competitive rates by investing in the deregulated regime. Similarly, the Government can only acquire their stock through open and competitive bidding process under the Procurement Rules. Therefore, the Government of the Punjab could not approbate and reprobate in the same breath. It could not solicit private investment for wheat procurement and storage against specific set of guarantees by deregulating the wheat sector pursuant to the Policy Notification and later, seize the wheat stocks of the private sector and compel them to sell it to private flour mills at an arbitrary price when the owners had acquired wheat stocks by relying upon the guarantees of the Government conferred through the Policy Notification and keeping in view the MSP of wheat fixed in the Wheat Policy for the former harvesting season. The Government has a lawful and legitimate right and power to provide subsidy to oppressed and less privileged classes but such subsidy must be provided by the Government from its own Exchequer. The Government cannot deprive one class of persons from receiving lawful and due compensation of its property in order to provide subsidy to the citizens. Therefore, if the Government intends to provide wheat, flour and roti at a price less than the prevailing market price, the price differential must be borne by the Government and the same cannot be realized by indirect compulsory sale of private wheat stocks without payment of due compensation at competitive market rates.

39.In view of the above, the titled and connected Petitions are allowed ; the impugned Notification is set aside; and it is declared that during the subsistence and continuation of deregulation plan pursuant to the Policy Notification, the Government of the Punjab and / or its functionaries have no lawful authority to fix the maximum retail price of wheat; the Government of the Punjab is only entitled to purchase wheat through an open competitive bidding under the Punjab Procurement Rules; and the owners of declared wheat stocks shall remain protected against anti-hoarding actions.

UN/M-193/L Petitions allowed.